Signatures sought for repeal measure

By Brad Cain
Associated Press

November 25, 2003

SALEM, Ore. -- Times still are tough in Oregon, and a tax increase will make them even tougher, says Dana Tokarski, a 33-year-old mother of four.

"In our family, we have a budget to keep. We would definitely feel any kind of increase in our taxes. It would make a difference," she says.

A movement is under way among voters to repeal a tax surcharge that is set to take effect in the spring. The effort began a few months ago when the Legislature passed the increase, but it may have gained momentum in recent weeks because of signs that the state's economy is improving.

Tax opponents have until Tuesday to gather 50,000 signatures to put the repeal measure on the Feb. 3 ballot, and they foresee no trouble surpassing that number.

Because of a slide in tax revenue caused largely by the bubble bursting in high-tech sector, the Legislature has spent the past two years cutting spending by $1 billion. It has resulted in shorter school years, the layoff of teachers and state troopers, and cuts in benefits for the poor and elderly.

In August, the Legislature approved an $800million tax package intended to protect schools, social services, the state police and others from another round of cuts. Under the package, signed by Gov. Ted Kulongoski, a household with the median state income of $41,000 would pay about $36 a year more.

Since then, revenue has begun to climb again and unemployment dropped to 7.6 percent last month, raising questions about whether the tax increase still is needed.

"Why take a chance by doing something irresponsible like raising taxes when things are improving?" said Russ Walker of Citizens for a Sound Economy.

But others say the upturn is not big enough to make up for the tax revenue that will be lost if the surcharge is repealed. Oregon does not have a sales tax.

"It's like finding a $10 bank error in your favor when you are trying to put together the money to buy a new car," said state Rep. Lane Shetterly.

In a poll conducted for Portland's KGW-TV, 56 percent of the respondents said they would vote against the surcharge if it appeared on the ballot.

If voters repeal the tax hike, automatic spending cuts will be triggered to balance the 2003-05 budget.

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